Development Account Project on the IS:implementation of the ‘1-2 Survey’

in the ESCWA region

Giovanni Savio, Statistics Division, UN-ESCWA

Expert Group Meeting on National AccountsCairo, 12 – 14 May 2009

Scheme of presentation

1. General overview

2. Project on “Interregional Cooperation on the Measurement of Informal Sector and Informal Employment”

3. Activities carried out in Pilot Countries

4. Outcomes, lessons learned and future steps

UN Regional Commissions

Budget of RCs from the following sources1. Regular Budget2. Regular Program for Technical Cooperation3. Extra Budget (i.e. DA Projects)

DA projects aim at capacity-building through sub-regional, regional and inter-regional Technical Cooperation for developing countries

Implemented as individual projects aimed at achieving distinct development impacts

Budgetary Issues

Overall Budget: $ 800,000 Duration: 4 years, 2006 - 2009 Implementing agencies: ECLAC, ESCAP

(leading agency), ESCWA ESCWA budget: $ 179,000 Steering Committee: UNSD, Regional

Commissions, ILO and Delhi Group

Project Facts

Project Countries

ESCAP

ESCWA

ECLAC

Informal sector (employment & contribution to GDP) mostly not covered in official statistics

Consequence: lack of exhaustivity Data collection typically based on ad hoc

studies (i.e. not part of regular collection system) and with limited scope/coverage

Data collected not internationally comparable Consequence: lack of coherency over time and

across areas Finally, poor analysis and dissemination

Reasons for DA Project

REGIONContributions of informal sector as %

of non-agricultural …

Employment GDPNorthern Africa 48 27

Sub-Saharan Africa 72 41

Latin America 51 29

Asia 65 31

Source: ILO (2002), Women and Men in the Informal Sector: A Statistical Picture

Reasons for DA Project

Reasons for DA Project

Informal Sector (Production)Informal Sector (Production)• Significant underestimation of GDP Significant underestimation of GDP • Lack of info on characteristics of Lack of info on characteristics of informal sector enterprises, use of informal sector enterprises, use of technology, access to credit, training, technology, access to credit, training, markets, etc.markets, etc.• Lack of info on input-output relations Lack of info on input-output relations between formal and informal sector between formal and informal sector enterprisesenterprises

Informal Sector (Employment)Informal Sector (Employment)• Implausibly low labor participation rates, Implausibly low labor participation rates, especially for women especially for women • Lack of info on differentials in earnings Lack of info on differentials in earnings and working conditions between and working conditions between formal/informal employment (poverty)formal/informal employment (poverty)• Lack of info on different social protection Lack of info on different social protection arrangements covering formal/informal arrangements covering formal/informal employmentemployment

Weaken the formulation, implementation and evaluation of

policies and programmes aimed at promoting gender equality,

eliminating child labour, generating decent work for all and

reducing poverty

Overall Goal

Improve the availability of informal sector and informal

employment data

1. Raise awareness among stakeholders (NSOs, the Governments etc.) of developing countries on importance of collecting and disseminating data on informal sector

2. Improve technical capacity of NSOs to collect, compile, analyze and disseminate data on informal economy in line with international methods and standards

A. AdvocacyB. Capacity

building C. Data collection

D. Data analysis & Dissemination

E. Knowledge management

Objectives and Instruments

Partnership approach (RCs and other entities), and …

… integration as far as concerns: Scope, coverage, definitions etc. Activities carried out

However, adaptation of activities to the level of development of the NSSs

Coordination with national and global statistics initiatives

Consistency with international standards (e.g. 2008 SNA, Delhi Group, ILO etc.)

Strategy of the Project

Raise awareness in stakeholders (concern on funding and sustainability of the approach for the future)

Data on informal employment and informal sector GDP

Country reports on: “1-2 Survey” methodology and its implementation “1-2 Survey” data analysis

Dissemination

Expected Outcomes

Sketch of Approach

1. Household Sector

2. Unincorporated enterprises owned by households

3.a Own-account enterprises3.b Enterprises of employers

4. Informal sectorenterprises

1. Size2. Registration3. Others

Unifying definition of the IS (XV ICLS Res.)

Sketch of Approach

Informal own-accountenterprises

Other enterprises ofemployers

Other own-accountenterprises

Enterprises of informal employers

Own-accountenterprises

Enterprises ofemployers

Informal sectorCriteria: size, registration,

others

(1)

(2)

Unifying definition of the IS (XV ICLS Res.)

Concretely, how to go from step 3 to 4? Problems undermining comparability and coherence

of IS estimates, for example: Registration requirements change over time, across

countries and often registration is made with more entities In some countries all units should be registered with tax

authorities Registration criterion reduces response rate and quality Registration of enterprise vs employees Cut-off size of employees may change over time, across

countries (i.e. different levels of technology), may refer to empl. on continuous basis or total empl. or empl. observed in the reference period, and may depend on legislation and statistical considerations

Sketch of Approach

Main dilemma: trade-off between flexibility and comparability

The flexibility in delineating the IS according to ICLS Resolution hampers comparability of outcomes across countries and over time. However, flexibility in the adaptation of the criteria is an important characteristic

Main features of the Unified Data Collection Strategy for the Informal Sector (UDCS-IS) Expanded scope of data collection, and flexibility ex-

post non ex-ante (comparative analysis on criteria) Coherency with international recommendations Comprehensiveness (all areas, activities etc.)

Sketch of Approach

Sketch of Approach

Household Enterprises

Producing at least some goods & services

for market

Producing goods & services only for own final use

Non-agricultural Agricultural Goods Services

Formal sector

Informal sector

Formal sector

Informal sector

Agriculture, forestry, fishing

Paid domestic services

Other activities Owner occupied dwelling services

HUEMs, starting point for Phase 2 data collection. Blue area, after (3) screening criteria applied in the LFS

HUEM1: Legal organization Production units that are not constituted as separate

legal entities independently of their owners

HUEM2: Book-keeping or accounting practice Production units that do not keep a complete set of

accounts

HUEM3: Product destination At least some of the products are sold/bartered in the

market

Sketch of Approach

Data colleted through variant of mixed household-enterprise survey called ‘1-2 Survey’

First phase: Household Survey, on which the sampling frame for the second phase is made Possibly build upon existing surveys with small

changes, preferably LFS (extended)

Second phase: Enterprise Survey Designed as a household-enterprise independent

module based on outcomes of the extended LFS

Sketch of Approach

Sketch of Approach

Participation in the ESCAP Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy, Bangkok, September 2007

ESCWA Workshop on Informal Employment and Informal Sector Data Collection: Strategy, Tools and Advocacy for PCBS staff, with participation of Jordan DoS, Amman, April 2008

Signature of ESCWA-PCBS LoA to participate in the DA Project as Pilot Country, June 2008

Activities Completed

August 2008: Pilot “1-2 Survey” carried out by PCBS in West Bank

September 2008: ESCWA Advisory mission to study results of the Pilot Survey

September 2008: Preparation for the Survey (training)

October 2008 - March 2009: Conduct of the “1-2 Survey” in West Bank and Gaza Strip

Activities Completed

Quarterly LFS carried out by PCBS since 1995 Last survey samples based on 1997 Census

updated in 2003 About 7,500 households interviewed each

quarter, questionnaires completed about 6,000 each quarter

“1-2 Survey”: Carried out during Q4, 4 October – 31 December 2008 on 11,338 households (7,644 in West Bank, 3,694 in

Gaza Strip)

PCBS LFS and ‘1-2 Survey’

Due to war, only 70% of Gaza sample was interviewed (2,553 over 3,694)

Phase 2, before war: 735 HUEMs found in West Bank, 163 in Gaza Strip interviewed

Second Round, after war: Completed collection for Gaza Strip, extended the sample in the same region to Q1 2009

Final results expected by mid-April 2009 Second advisory mission of ESCWA to PCBS:

end of April 2009 to analyze results

PCBS LFS and ‘1-2 Survey’

Activities PlannedESCWA Timeline of Activities (Revised January 2009)

Quarter Year Responsible 

Advocacy/Dissemination Workshops      

1 Customize workshop design and produce materials Q3 2009

ESCWA - PCBS2 Conduct of advocacy/dissemination workshop in country Q4 2009

3 Preparation and submission of reports on workshop Q4 2009

Data Collection      

1 Data collection in Palestine Q4 2008 - Q1 2009 PCBS

2 Prepare and submit final reports on data collection Q2 2009 PCBS

Data Editing, Analysis and Dissemination      

1 Data checking and editing, preparation of dataset for analysis Q1 2009

ESCWA - PCBS

2 Preparation of tables Q2 2009

3Generation of estimates of informal employment and employment in the

IS and national accounts and related country reports Q3 2009

4 Country report on analysis of 1-2 Survey data for dissemination Q3 2009

5 Development of country database Q3 2009

Training Workshops      

I. Workshops for project country     All RCs and PCBS1 Interregional Workshop for Sharing Results and Project Evaluation Q3 2009

II. Workshops for project country and other countries in the region    ESCWA, PCBS

and other1

Regional Workshop on the Measurement of the Informal Sector and Informal Employment Q2 2009

Knowledge Management

1 Prepare country report Q4 2009 ESCWA - PCBS

Consistency with international recommendations Great flexibility and adaptability Ex-post analysis and identification of IS Expanded scope Easy applicability, reduced costs for collecting

information Information gathered possibly for use in various

socio-economic studies and analyses Reliability of final results Ambition: extend application to other countries in

the region

Lessons learned (so far)